Nigeria’s Economic Reforms Attract Global Investors: A Promising…

Global investors are increasingly drawn to Nigerian assets as reforms from the Central Bank of Nigeria boost key economic sectors. Stocks are rising and bond yields are falling, indicating restored confidence. Projections suggest improvements for the Nigerian economy by 2025, with crucial structural reforms in place to ensure a stable exchange rate and attract investments.

Investors worldwide are increasingly attracted to Nigerian assets, with the reforms implemented by the Central Bank of Nigeria (CBN) positively influencing major economic sectors. As a result, investor confidence has surged, driving stock prices higher and reducing bond yields. Bismarck Rewane, Non-Executive Director at Parthian Partners, indicates a significant shift, suggesting that Nigeria’s economy is moving beyond its most challenging reform phases by 2025.

The country has seen a notable decline in its sovereign risk spread, now at its lowest since January 2020. This recovery in investor sentiment follows the pivotal currency reforms and various measures aimed at economic revitalization, demonstrating Nigeria’s resilience in the face of global economic turbulence. Emre Akcakmak, Portfolio Manager at East Capital, remarked that Nigeria is re-emerging in the global market as reform initiatives take effect.

Additionally, Akcakmak noted the enhanced liquidity of the currency and better conditions for profit repatriation, supported by a stable naira. The positive movements in Nigeria’s bond market are evident, with yields on eurobonds decreasing and domestic debt auctions receiving overwhelming investor interest.

Looking toward 2025, the effects of recent economic reforms will significantly benefit local businesses, contributing to an optimistic future for Nigeria’s economy. Rewane elaborated on the critical role of strategic policy implementation for sustainable growth and emphasized the necessity of improving the management of these reforms to ensure stability in exchange rates.

Persistent challenges such as power supply inefficiencies and a lack of transparency in the oil and gas sector remain pressing issues that require immediate structural reforms. Professor Olayinka David-West from the Lagos Business School highlighted the need for a “digital-first mindset” to enhance fiscal discipline and planning through technological advancements.

Experts, including Chinyere Almona, Director-General of the Lagos Chamber of Commerce, pointed to high energy costs as a key inflation driver, necessitating urgent solutions for power supply issues. Investment and infrastructure improvements are also critical focuses, with calls for a conducive environment to attract private sector participation emphasized by Yemi Sadiku from Parthian Group.

Positive signs, such as improvements in government revenue and the introduction of an electronic foreign exchange matching system, suggest an economic recovery is underway, according to FirstBank’s CEO, Olusegun Alebiosu. The anticipated N49.7 trillion budget for 2025 is considered a crucial economic stimulus, potentially leading to a projected GDP growth rate of 3.68%.

In conclusion, Nigeria’s economic outlook is markedly improving, bolstered by recent reforms and growing investor confidence. Key analysts predict a gradual exit from past difficulties, emphasizing the importance of continued structural reforms and targeted investments. Challenges remain, particularly in sectors like energy; however, the overall sentiment points toward a positive trajectory for Nigeria’s economy leading up to 2025. The government’s proactive measures and substantial budget propose a supportive environment for sustainable growth.

Original Source: businessday.ng